Commodity Blog

Crude oil declined at a fastest pace since January 4th today as the reported inflation data in China made the investors believe that the consumption of this widely traded commodity won’t be growing as fast as expected.

The Brent was falling to the lowest level since January 11 mid-day but then it has managed to recover almost 50% of its daily decline. The oil wasn’t alone in this fall — all precious and industrial metals (except nickel) decreased today. China reported its inflation data at 2:00 GMT today, showing December yearly CPI at 4.6 percent and PPI at 5.9 percent. PPI was expected at 5.7 percent, while CPI was the same expected.

The global domestic product rose by 9.8 percent in the fourth quarter of 2010 in China, which is above the median forecast of 9.4 percent. The market analysts believe that at the current levels of the macroeconomic indicators will allow Chinese authorities to conduct a stricter monetary policy, which will eventually lead to slower growth and less demand for crude.

Oil declined from $97.79 to $96.66 per barrel or 1.15 percent as of 17:25 GMT with a daily low at $95.44 per barrel today.

If you have any questions and comments on the commodities today, use the form below to reply.